Top 4 Advantages of Third-Party Utility Billing

Third-party utility billing is gaining steam with landlords and property managers fed up with the DIY approach. But is life actually better after making the switch? We break it down.

Unbilled utility expenses can kill profits for multi-unit property owners and managers. Even worse, attempting to recover the costs involves a ton of work and can introduce a handful of legal and logistical pitfalls that most don’t have the know-how to navigate.

Fortunately, third-party RBC (read, bill, collect) companies offer a way to cut down and/or recover these costs without having to do the work yourself. But third-party billing also comes with a few other benefits worth considering. Let’s look at what advantages you can expect to find in a partner.

Saves You Time

Managing utility billing is a lot of work for an in-house team. From meter reads and data verification to invoice generation and payment collection, there’s a lot that needs to get done. This work steals away resources most property managers can’t spare. In-house staff don’t have enough time to worry about additional utility responsibilities.

RBC companies have a staff dedicated to utility billing and collection. This means it’s all they do, and they can do it better and faster. So, you instantly get back all of the time you were spending on billing. And this is time you likely weren’t measuring – which means you were never aware of how much it really cost you.

apartment building illustrating benefits of third party billing

Increases Cost Recovery

The goal of deploying utility billing is to maximize cost recovery, which improves NOI (net operating income). Outsourcing to a third-party utility billing company contributes to this goal in several ways.

First, third-party outsourcing adds legitimacy to the bill, which makes tenants more likely to pay. When the company sends out the bill, tenants know it’s from a reputable third party. This provides more confidence in the accuracy and fairness of the bill.

Second, billing companies provide customer service for tenants. Because they can knowledgeably address questions about that bill, RBCs are able to troubleshoot issues that might otherwise prevent residents from paying.

Third, a billing company can add multiple payment channels that a landlord doesn’t have access to. These include cash, check, phone and online portal. RBCs can also accept payments 24/7. This enables tenants to pay their bills through their channel of choice at any time of day they’d like. And the more payment channels and flexibility you offer, the greater the likelihood you’re going to recover the expense.

Solves Problems You Weren’t Prepared For

When deploying utility billing, there are a lot of decisions to make, like submetering vs RUBS. Or what billing factors you should use.

Third-party utility billing companies can make sure you get the right system in place with proper installation. Technicians that have installed hundreds of submeters will do it better than an in-house team.

RUBS experts are familiar with the data and are trained to notice exceptions. This avoids over billing, which would cause legal fees and liability (more on that in a bit).

Working with an experienced team helps you do it right the first time. This eliminates potential issues before they come up, saving properties money in the long run.

In addition to solving problems before they happen, working with a third party also makes the roll out of bills better. The goal of utility billing is not to throw bills together and stick them in mailboxes. Rather, it’s to create a fair bill that tenants understand and will pay.

If an in-house team just throws utilities on the bill, tenants will push back. Third-party utility billers make roll-out better by making sure residents are educated about the bill. In our experience, tenants are more likely to pay utility bills they understand.

Legal Compliance

Utility billing laws are complex. States, cities and counties have specific laws and regulations that impact how landlords can bill utilities.

In some states, like Delaware, RUBS billing is illegal. In other states, like Louisiana, you can bill for some utilities but not others. There’s mandatory guidelines about what information needs to appear on a bill. You’re also restricted in how much can you charge and how much time you have to give tenants to pay. Grace periods and processing fees are regulated.

Violating one of these regulations is a serious legal liability. To avoid the penalties and litigation, it’s worth working with experts who understand the regulations and how they affect your property. The right third-party utility billing company will keep you within the limits of the law while ensuring a successful deployment.


Partnering with a third-party utility billing company is a great way to start recovering utility expenses. But there are a host of other benefits you probably never considered. If you’re tired of the DIY approach, it might be time to get a few quotes.